The Defence Procurement Manual 2025 represents a transformative milestone in India’s defence acquisition framework, as it was officially released by Defence Minister Rajnath Singh and will become effective from November 1, 2025. This comprehensive revision arrives after sixteen years, replacing the outdated 2009 manual with a modernised framework designed to address contemporary defence challenges. The Defence Procurement Manual 2025 governs revenue procurement worth approximately ₹1 lakh crore annually for acquiring goods and services essential for daily operations, maintenance, and readiness of all Defence Services and Ministry of Defence establishments. The political-administrative significance of this policy reform cannot be overstated, as it fundamentally restructures how India’s armed forces procure operational necessities while advancing the nation’s self-reliance agenda in defence manufacturing.
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Understanding the Scope and Purpose
The Defence Procurement Manual establishes comprehensive rules for acquiring goods and services needed for daily operations, maintenance, and readiness of all Defence Services and Ministry establishments, distinct from the Defence Acquisition Procedure, which governs capital acquisitions. While capital procurement addresses major platforms like fighter aircraft and naval vessels, the Defence Procurement Manual 2025 focuses on sustenance requirements, including ammunition, spare parts, fuel, clothing, repair services, and logistical support that keep military operations functioning efficiently.
The manual aims to foster jointness among the three Services, maintain the highest level of military preparedness through expeditious decision-making, ensure the timely availability of requisite resources to the armed forces at appropriate cost, and leverage the potential of the domestic defence market by ensuring active participation of private players, MSMEs, and Defence Public Sector Undertakings. This comprehensive approach addresses both operational efficiency and strategic autonomy simultaneously.
Key Structural Reforms and Innovations
The Defence Procurement Manual 2025 has been organised into two volumes, with Volume I containing fourteen chapters, including three entirely new chapters dedicated to Promoting Self-reliance through Innovation and Indigenisation, Information and Communication Technology Procurement, and Consultancy and Non-Consultancy Services, while Volume II contains all forms, appendices, and government orders. This structural reorganisation reflects a strategic shift toward comprehensive policy integration.
The decentralisation of procurement authority represents one of the most significant administrative reforms. Key decision-makers designated as Competent Financial Authorities have been granted expanded autonomy to approve purchases, extend deadlines, and make procurement decisions without waiting for clearance from higher-ups. This delegation of power to field-level authorities promises to dramatically reduce procurement timelines and eliminate bureaucratic bottlenecks that have historically plagued defence acquisitions.
Promoting Indigenous Defence Manufacturing
The Defence Procurement Manual 2025 places unprecedented emphasis on indigenisation and self-reliance. A transformative reform involves abolishing the requirement for No Objection Certificates from Defence Public Sector Undertakings before issuing open tenders, ensuring fair competition and creating a level playing field for private sector participants. This elimination of the NOC requirement dismantles a significant barrier that previously favoured DPSUs and restricted market competition.
To facilitate industry participation, the manual offers guaranteed orders for up to five years with potential extensions to ten years in special circumstances, introduces handholding measures where the Armed Forces assist companies by sharing technical knowledge and existing equipment, and significantly relaxes penalties during development stages. These provisions specifically address working capital challenges and risk concerns that have deterred private sector investment in defence manufacturing.
Penalty Reforms and Industry-Friendly Provisions
The Defence Procurement Manual 2025 implements substantial relaxation of liquidated damages, capping maximum penalties at 10 per cent only in cases of inordinate delay, while indigenisation projects receive exceptional treatment with only 0.1 per cent penalty per week instead of the standard 0.5 per cent applicable in other cases. This graduated penalty structure explicitly incentivises domestic development and acknowledges the inherent uncertainties in indigenous innovation.
During the design and prototyping phase, no penalties will be levied, and even post-development, penalties remain minimal at 0.1 per cent, with maximum penalties reduced to per cent and a 10 per cent cap reserved only for cases involving significant delays. These provisions recognise that innovation involves risk and that punitive measures should not discourage genuine attempts at indigenous development.
Strategic Alignment and Modernisation
The Defence Procurement Manual 2025 has been specifically aligned with updated provisions of the Ministry of Finance’s Manual for Procurement of Goods to ensure fairness, transparency, and accountability while incorporating greater use of technology in procurement processes. This synchronisation with central government procurement standards establishes uniform practices across ministries while maintaining defence-specific requirements.
The manual addresses the requirements of modern warfare by enabling faster procurement cycles and facilitating access to emerging technologies through streamlined procedures and enhanced industry collaboration. In an era where technological superiority increasingly determines military effectiveness, these provisions ensure that procurement systems do not become obstacles to capability enhancement.
Implementation Timeline and Transition Provisions
All cases where Requests for Proposal have already been issued or will be issued up to October 31, 2025, will continue to be governed by provisions of DPM 2009 as amended, while cases where an RFP was issued in the past but has been retracted and needs reissuing on or after November 1, 2025, will be governed by DPM 2025 provisions. This transitional framework balances continuity for ongoing procurements with progressive adoption of new procedures.
Supporting Ecosystem and Innovation Initiatives
Supporting Ecosystem and Innovation InitiativesThe Defence Procurement Manual 2025 operates within a broader ecosystem of indigenisation initiatives. The Innovations for Defence Excellence scheme, launched in 201,8, engages startups and MSMEs by providing grants up to ₹25 crore under the ADITI sub-scheme, resulting in more than 430 contracts and procurement of 43 items worth ₹2,400 crore. These complementary programs create a comprehensive support structure for defence innovation.
The SRIJAN Portal, launched in 202,0, lists imported items for indigenisation with more than 38,000 items uploaded and over 14,000 already indigenised, while five Positive Indigenisation Lists issued between 2020 and 2025 cover over 5,500 items of which more than 3,000 have been indigenised. This systematic approach to import substitution demonstrates committed institutional support for domestic manufacturing capabilities.
Challenges and Implementation Considerations
Despite widespread recognition as positive reform, implementation faces potential challenges, including the necessity for cultural shifts in traditionally compliance-heavy procurement organisations where risk-averse habits must be overcome through structured training. Behavioural transformation in bureaucratic institutions requires sustained leadership commitment and institutional incentive restructuring.
Implementation could encounter difficulties if the domestic industry proves unable to meet the technical requirements or quality standards of the armed forces, necessitating handholding by the Services and government incentives to ensure the industry rises to these challenges. The success of indigenisation ultimately depends on genuine industrial capability development rather than merely preferential procurement policies.
Conclusion: Transformative Potential for National Security
Conclusion: Transformative Potential for National SecurityThe Defence Procurement Manual 2025 represents far more than administrative refinement; it constitutes a strategic reorientation of India’s defence acquisition philosophy. By simultaneously addressing procurement efficiency, indigenous capability development, and operational readiness, the manual establishes an integrated framework for building a self-reliant and responsive defence ecosystem. As modern warfare becomes increasingly fast-paced and technology-driven, the Defence Procurement Manual 2025 provides a strong foundation for ensuring India’s Armed Forces remain equipped, efficient, and future-ready. The ultimate success of this transformative initiative will depend on consistent implementation, sustained political commitment, and the domestic industry’s capacity to deliver quality products that meet stringent military specifications. The Defence Procurement Manual 2025 has established the policy framework; translating this potential into operational reality remains the critical challenge ahead.
